I. Field of the Invention
This invention relates generally to a method of on-site refueling, i.e., delivering petroleum and similar products from a tank truck into customer vehicles or other tanks at a customer's site. More particularly, it relates to a method of ensuring the delivery of the proper petroleum or similar product, and the accurate recording of the delivery, from a plurality of petroleum and similar products carried on a tank truck, into customer vehicle fuel tanks (whether the vehicles are, for example, automobiles, trucks, or buses in a restricted company parking lot; or are construction machines and trucks at a construction site), and later verifying compliance with this method of delivery.
II. Discussion of the Related Art
The present invention is related to the Petroleum Delivery Method set out in Applicant's earlier-filed U.S. application Ser. No. 08/296,727, filed Aug. 26, 1994 (now U.S. Pat. No. 5,420,707). That earlier-filed Application discloses a method for assuring proper truck delivery of petroleum and similar products from a refinery or fuel bulk storage facility to a retailer's tanks, that utilizes a hand-held probe for interrogating machine-readable identifiers associated with the retailer's tanks and with the delivery truck's fuel delivery spigots. The present invention takes that method a step further and greatly simplifies the delivery of proper petroleum and similar products directly into a customer's fleet of vehicles located at that customer's site.
Currently, in the on-site delivery of petroleum and similar products, a delivery truck is used to transport various quantities and types of the products from a storage facility to customer sites, and then to deliver the products into customer vehicles or tanks at each site. The truck that is used is usually a 2,000- to 4,000-gallon truck, and is usually partitioned into several tank compartments for transporting various types of products. Each compartment of a typical delivery truck has an outlet valve, which controls the flow of the compartment's product to a pump, a meter, and a delivery hose, which may be shared with some or all of the other compartments by means of one or more manifolds. In many cases, the delivery truck will have more than one meter, each with an associated delivery hose, to thereby be able to meter more than one product, such as gasoline and diesel fuel, from the different compartments. Another reason to have more than one meter is to physically separate and bill differently for two different diesel fuels--one, tax-paid and undyed for use in vehicles licensed for on-road use; the other, tax-free and dyed for use in off-road vehicles, or construction equipment, or for use in heating.
In the past, a delivery truck driver delivering to a list of customer sites would be provided with Delivery Lists that identified the load number, the truck, the driver, the storage facility, the quantity and type of product to be loaded into each delivery truck compartment, the list of customer sites to which deliveries should be made, and a general description of the vehicles to be refueled. Markings on the vehicles, or the absence of markings, may indicate to the driver which vehicles to refuel, and which fuel to use if the driver's delivery truck contains more than one type of fuel. The Delivery Lists, a specimen of which is shown in FIG. 4, contain all of the information the driver needs to complete the deliveries to be made by the driver for the day.
When the driver arrives at each customer site, the driver manually records the beginning delivery truck meter reading, or meter readings if there is more than one meter on the truck. The driver then identifies one customer vehicle at a time, manually records its number or identity, and then refuels it depending on written instructions, vehicle markings, or the driver's personal judgment in regard to the choice of the proper fuel for each vehicle. At the completion of refueling each vehicle, the driver again must manually record a meter reading, the difference between it and the previous reading of that meter being the gallons delivered into the vehicle. Because the meter is located on the delivery truck, and considering that the delivery hose may be up to 150 feet long, this can be very wasteful of the driver's time. One solution is a radio-operated meter readout device carried by the driver, which saves walking time, but still requires manual recording by the driver and manual transcription by an office employee, both subject to error.
To efficiently produce an accurate list of vehicles refueled for substantiation of customer billing, there is a need to reduce the opportunity for errors in this process, and to eliminate all unnecessary labor. Even more important is the requirement to better control the refueling operation itself in regard to the delivery of the proper type of fuel into each vehicle, considering the vehicle's engine requirements, the tax laws, and environmental laws and regulations.
The most obvious vehicle engine requirement is that gasoline engines only be fueled with gasoline, and diesel engines with diesel fuel. If the driver refuels a gasoline-powered vehicle with diesel fuel, or vice versa, and the error goes undiscovered until the engine quits, the repair can be very costly. Even more serious is erroneously refueling emergency vehicles or small aircraft. In addition, some diesel vehicles in cold weather may require a blend of #1 and #2 diesel fuel to operate dependably, which is up to 10 percent more expensive than straight #2 fuel; yet, refueling all diesel vehicles with this blend may be unnecessarily costly, or may not be desired by some customers. Therefore, a method of dependably using the correct diesel fuel blend can be economically desirable to the refueler and to the refueler's customer.
The federal fuel excise tax laws introduce additional operating and financial considerations to the refueling process. (State tax laws will not be considered here because they differ from each other, and only add additional complexity.) Federal gasoline taxes are more complicated than federal diesel taxes, having four different per-gallon rates, currently $0.184, $0.1532, $0.1424, and $0.13, depending on the percentage of ethanol used, if any, in a blend with gasoline. These different rates can have an effect on the refueler's purchasing decisions, and must be properly shown on customer billings, but they are of minor importance in the refueling process itself, as long as the gasoline or blend provided in refueling meets the environmental regulations discussed below.
Federal gasoline taxes are owed by the refueler upon the refueler's accepting delivery from a refinery or terminal; there are no tax-free deliveries of gasoline to the refueler, even though some of the refueler's customers may not be subject to the tax. A tax-exempt customer may always claim a tax refund, but the refueler has the option to deliver the gasoline tax-free and to claim the refund itself as a service to two specific classes of customers: state and local government agencies, and nonprofit educational organizations. Therefore, the most important tax considerations in refueling with gasoline products are that the refueler include the applicable taxes in the customer billing according to the law, and to the arrangement with that customer if the customer is tax-exempt; that the taxes be accurate in regard to the gasoline blend delivered (using the correct rate from among the four possible rates); and that the documentation of the vehicles refueled be sufficient to support the billings and tax refund claims.
Federal diesel taxes have only one rate, currently $0.244 per gallon, but are importantly different from gasoline taxes in that diesel fuel can be purchased by the refueler tax-free, since much of it is used in tax-free vehicles, and for tax-free heating and other off-road uses. This means that the refueler may have to purchase, store, and deliver up to three different diesel fuels to provide competitive pricing to customers and to avoid paying expensive taxes while awaiting tax refunds from the government. The three diesel fuels are: tax-paid, undyed, low-sulfur diesel fuel for on-road use; tax-free, dyed, low-sulfur diesel fuel for qualifying tax-exempt buyers for on-road use; and tax-free, dyed, high-sulfur diesel fuel for off-road use only. There are serious penalties for refuelers who violate these tax laws. Even innocent mistakes can be very costly to the refueler since the taxes on each gallon can be more than ten times the refueler's gross margin on each gallon sold. Therefore, the most important tax considerations in refueling with diesel fuel products are that accurate, detailed records be kept of each delivery of tax-free fuel to substantiate its validity and the subsequent tax-free billing; that each delivery of tax-paid fuel include the taxes in the customer billing according to the law, and to the arrangement with that customer if the customer is tax-exempt; and that the documentation of the vehicles refueled be sufficient to support the billings and tax refund claims. A tax-exempt customer may always claim a tax refund for tax-paid diesel fuel, but the refueler has the option to deliver the fuel tax-free and to claim the refund itself as a service to two specific classes of customers: state and local government agencies, and farmers (but not non-profit educational organizations, as in the case of gasoline). All other tax-exempt customers (intracity bus companies, school bus operators, and non-profit schools, for example) must file their own claims, for which they must have accurate delivery records from the refueler regarding each day's deliveries.
The environmental laws and regulations add another layer of complexity to the refueling process. As of Jan. 1, 1995, the United States' nine most severe ozone non-attainment metropolitan areas are required to use only reformulated gasoline (RFG), which is expected to be $0.10 or more per gallon more expensive than non-RFG gasoline. Another 30 less severe ozone non-attainment metropolitan areas have the requirement that they use only oxygenated gasoline during the winter months, which is usually satisfied by a gasohol product (a blend of gasoline and ethanol). Gasohol is also more expensive than straight gasoline, although it carries a federal tax credit, which could offset some or all of the price difference, depending on the comparative prices of gasoline and ethanol on the market each day. The requirement for RFG and oxygenated gasolines in these 39 non-attainment areas applies to dispensing at the retail level and to deliveries to retail and commercial users located in these areas, which includes refueling deliveries. Since these 39 areas are defined by county boundaries, and many, if not most, refuelers serve customers both inside and outside the defined areas, the refueler must be absolutely certain that a qualifying, and higher cost, gasoline product is delivered into vehicles within the defined areas; but also offer a less expensive product to customers outside the areas.
The environmental laws and regulations are similar in regard to diesel fuel. Since Oct. 1, 1993, diesel vehicles licensed for highway use must use only low-sulfur diesel fuel. This fuel is sold tax-paid to the refueler as an undyed product that is legal for any vehicle to use on the highway. (If used in a qualifying tax-exempt vehicle, or for other non-taxable use, a tax refund can be claimed.) The traditional, high-sulfur diesel fuel is now restricted to off-highway use, such as for heating or for construction equipment. This fuel is sold tax-free to the refueler dyed red, and is never legal in a highway vehicle. Since many on-highway diesel vehicles are not subject to the federal diesel tax, the refueler can also buy a third diesel product, a tax-free, low-sulfur diesel fuel dyed red that is legal on the highway only in qualifying tax-exempt vehicles, such as state and local government vehicles, school buses, and intracity buses, for example.
There are severe penalties for failure to follow these environmental regulations covering gasoline and diesel fuel deliveries, including fines of up to $25,000 per day per violation. Everyone in the distribution chain can be cited for a violation, from refiner to truck driver, if they "knew or should have known" of prohibited deliveries. Even inadvertence may not prevent a citation. In summary, the refueler's environmental obligations regarding gasoline and diesel fuel deliveries are complicated but indisputable: make absolutely certain that each gasoline product is legal for the geographic area into which it is delivered; make absolutely certain that each dyed diesel product is legal for the vehicle or tank into which it is delivered; provide delivery documents to customers that explicitly identify the products delivered according to mandated terminology; and keep a detailed record of every delivery made as proof of compliance.
There is a need to ensure compliance by the delivery truck drivers with all of these requirements: to advise the driver of the proper fuel to use for each vehicle, considering the vehicle and the geographic area; to confirm to the driver that the correct delivery hose has been selected to deliver this fuel; to directly control fuel deliveries into critical vehicles, such as emergency vehicles; to calculate and record the gallons delivered and identify the product for each vehicle's fuel delivery; to record and analyze what the driver actually does, and to warn of errors; and to keep an accurate, detailed record of all refueling actions for customer delivery and billing documents, proof of compliance, and substantiation of tax refund claims. Compliance by the drivers reduces the amount of potential liability the refueler may have for improper delivery of the various products.
The method and apparatus of the present invention satisfies all of these requirements. It is accordingly a principle object of the present invention to provide a method for ensuring delivery of the proper petroleum or similar product from a delivery truck into each customer vehicle or storage tank; to promptly warn the driver of errors; and to record the exact gallons delivered and the product identity for each vehicle's fuel delivery.
Another object of the present invention is to provide a method for delivering products with increased accuracy that is economical, simple, and efficient to use.
Yet another object of the present invention is to provide a method for delivering products that is reliable, dependable, cost effective, and easy to follow.
Still another object of the present invention is to provide a method for delivering products that reduces the risk of transferring into a customer vehicle a type or blend of petroleum or similar product that is improper for that vehicle or geographic location; to directly control the refueling of critical vehicles, whose engine failure could be especially serious; and to warn the driver of erroneous refueling of other vehicles before the driver leaves the customer site.
A further object of the present invention is to provide a method for delivering products that includes a system of monitoring the driver's delivery actions for conformity with the delivery instructions for each customer vehicle; and to evaluate all of the driver's actions, after the fact, for conformity to the delivery procedures, and for improving the process from experience.
Yet a further object of the present invention is to capture, in computer-processable form, all of the details of each vehicle delivery, including gallons delivered and the product identity, for computer preparation of customer delivery and billing documents and tax-refund documents, and for posting inventory, sales, and financial records.
Still a further object of the present invention is to eliminate unnecessary labor in manually recording and transcribing data regarding refueling deliveries, as well as to eliminate the errors that this causes.